EXHIBIT 10.1
[Letterhead of
Obagi Medical Products]
March 24,
2008
Mr. Stephen
Garcia
9839 La Arena
Circle
Fountain Valley, CA
92708
Re: Transition
Arrangements
Dear
Stephen:
The purpose of
this letter is to confirm the circumstances of your employment with
OMP, Inc. over the next four months as we have discussed
recently. Our intent is to facilitate the Company’s
orderly transition to a new CFO & EVP of
Operations & Administration, and to provide you with the
possibility of a substantial monetary reward, the “Transition
Success Payment,” in exchange for your cooperation in that
transition.
We plan to
continue your employment as CFO at your current salary and benefits
until July 15, 2008. During that period of time you will
be transitioning your duties and responsibilities to others, as
directed by the Company, and you will use your best efforts to
ensure a smooth transition. Although our plan is to continue
your employment through July 15, your employment status until
that time will remain “at will,” which means that
either you or the Company may end your employment at any time for
any reason.
Provided that you
remain employed by the Company until July 15, 2008 and you
have performed your transitional duties to the Company’s
reasonable satisfaction, you will be eligible based at the
CEO’s sole discretion, to receive a Transition Success
Payment equal to your current annual salary of $253,000 payable
over a period of one year on the Company’s normal payroll
cycle, less all normal payroll deductions. During the period
of time that you receive this payment, you will not be an employee
of the Company and you will not be eligible to receive any benefits
provided to the Company’s employees. In addition, you
will be eligible based at the CEO’s sole discretion, to
receive any and all stock options that remain unvested, that would
have vested between the Separation Date and December 31, 2008,
shall be deemed fully vested and immediately exercisable, as of the
Separation Date. If your employment ends for any reason
before July 15, 2008, unless by mutual agreement with the CEO,
you will not be eligible for this payment or the accelerated stock
vesting. Your receipt of this payment shall be conditional
upon your execution of a release of all claims as stated in
Exhibit A attached hereto.
Exhibit A
Separation Agreement and
General Release
For good and valuable
consideration, the parties below enter this Separation Agreement
and General Release (the “Agreement”).
1.
Parties . The parties to this Agreement are Stephen
Garcia, his heirs, representatives, successors and assigns
(hereinafter referred to collectively as
“Mr. Garcia”) and OMP, Inc. and/or any of its
successors, subsidiaries, affiliates, parents, and related
companies (hereinafter referred to collectively as the
“Company”).
2.
Separation from Employment. Mr. Garcia
acknowledges and agrees that his employment relationship with the
Company has ended, effective July 15, 2008 (the
“Separation Date”), and has not been terminated earlier
by either party.
3.
Separation Benefits. As consideration for the
promises and covenants of Mr. Garcia set forth in this
Agreement the Company will pay Mr. Garcia a Transition Success
Payment equal to one year of pay at his current rate of
compensation of $253,000. This sum shall be paid over a
period of one year in equal installments on the Company’s
normal payroll schedule, less all normal payroll deductions.
Mr. Garcia shall not be an employee of the Company during the
period that these payments are made, and he shall not be eligible
for any benefits provided to the Company’s employees during
that period. These payments will begin on the first normal
payroll date after the effective date of this Agreement. In
addition, you will be eligible based at the CEO’s sole
discretion, to receive any and all stock options that remain
unvested, that would have vested between the Separation Date and
December 31, 2008, shall be deemed fully vested and
immediately exercisable, as of the Separation Date.
Mr. Garcia will be allowed to continue, at
Mr. Garcia’s sole expense, his coverage in the
Company’s group health plans, pursuant to applicable law
(COBRA).
4.
No Other Payments Due. Mr. Garcia acknowledges
and agrees that he has received all salary, accrued vacation,
bonuses, or other such sums due to him other than the Transition
Success Payment.
5.
Release of Claims By Mr. Garcia. As
consideration for the promises and covenants of the Company set
forth in this Agreement, Mr. Garcia hereby fully and forever
releases and discharges the Company and its or their current and
former owners, shareholders,
